Compliance and Diversification Key Drivers for Multi-Managers

Stephen Harris

4 October 2005

Thirty-six per cent of intermediaries polled in a recent survey by Credit Suisse Asset Management said they chose multi-manager products because of an increase in regulation. According to the survey, intermediaries are more comfortable outsourcing fund selection and monitoring to the experts given the current regulatory environment. The most important reason for advisors opting for the multi-manager route, given by 68 per cent of the respondents, was expert fund selection and diversification. The survey of more than 500 intermediaries, carried out during one week in September, during CSAM’s multi-manager roadshow, also found that 38 per cent of respondents cited reduced administration as a key influencer in choosing multi-manager funds. Other reasons given included performance, core/satellite propositions, clients’ risk profiles and asset allocation. Also according to the survey, the average level of investment business in multi-manager funds currently stands at 34 per cent of all investment recommendations and this is expected to increase. “The spread of investments was the key reason for picking multi-manager funds given by the intermediaries questioned in our survey, which highlights that their clients are demanding the highest levels of diversification, not just by country, sector or style but by fund management group," said Robert Burdett, joint head of Credit Suisse multi-manager services. He added: "No one group, team or manager has the monopoly on investment talent. Therefore, the key proposition of multi- manager is to seek out the best investment management skills from around the world with the aim of achieving the best results for our investors.”